A photo of hockey great Gordie Howe was unveiled at the announcement that the Detroit River International Crossing will be named the Gordie Howe International Bridge, on the waterfront, in Windsor, Ontario, Thursday May 14, 2015.Dave Chidley/The Canadian Press
Here's a sobering thought for Justin Trudeau's Liberal government as it prepares to sink billions of dollars into the Gordie Howe International Bridge.
What if few people use the towering new six-lane span linking Windsor, Ont., to Detroit, Mich.?
The economics of the new bridge – one of the riskiest and most complex infrastructure projects Ottawa has ever undertaken – depend heavily on future toll revenue. It's how the federal Crown corporation created to build the bridge will recoup the roughly $4-billion spent on infrastructure, including the cost of access roads and Canadian and U.S. customs plazas.
But revenue could prove hard to come by if Ottawa doesn't make peace with the litigious Moroun family, which owns the neighbouring Ambassador Bridge.
Competition for traffic could render the new bridge a white elephant on an even grander scale than Toronto's little-used airport express train. The Moroun family, which collects roughly $60-million a year in tolls, has no intention of getting out of the bridge business. Quite the opposite: It wants to expand the 87-year-old Ambassador Bridge, a vital trade conduit that carries $120-billion a year worth of Canada-U.S. trade. The Morouns are also waging a fierce legal battle in both Canada and the United States to stop the new bridge.
A key problem for the $456-million Union-Pearson Express (UPX) is that travellers have a range of cheaper and more convenient options to get to the airport. The same dilemma could face the operators of the Gordie Howe bridge if the Morouns slash tolls to protect their turf.
The new bridge holds out the promise of speedier crossings for shippers and travellers because it will directly link Ontario's Highway 401 to the U.S. Interstate network.
But at what price? Dismal ridership on the UPX demonstrates that there is a limit to the premium people will pay to get where they're going. It's a cost-benefit calculation.
A costly toll war could similarly skew the economics of the Gordie Howe bridge.
A lot is riding on the new bridge as Canada embarks on the largest infrastructure-building boom in a generation. The federal government alone plans to double its spending on national and local projects to $125-billion over the next decade.
All that infrastructure spending will provide a huge short-term to boost the economy – in labour, materials and services.
Ottawa will also be judged on the longer-term benefits. Will a better bridge make the economy more efficient, drive trade and create permanent jobs?
Officially, the price of the bridge and customs plazas is $2.1-billion (U.S.). Access roads are expected to swell the total to roughly $4-billion (Canadian).
The final bill will almost certainly be significantly higher. The devalued Canadian dollar is expected to add nearly $1-billion to the bill because much of the labour, materials and land will be purchased in the U.S.
Ottawa plans to guarantee the debt incurred by the public-private partnership that is selected to build the bridge. The Windsor-Detroit Bridge Authority, a Canadian Crown corporation, will manage the project on behalf of Canada and Michigan, collect the tolls over several decades and then repay construction costs incurred by Ottawa and its private partners.
Ottawa recently invited three groups to bid on the bridge: Legacy Link Partners (led by SNC-Lavalin of Montreal and Vinci of France), Bridging North America (ACS of Spain, Fluor of Irving, Tex., and Toronto-based Aecon Group) and CanAm Gateway Partners (Toronto-based EllisDon, Bechtel of San Francisco and BBGI of Luxembourg).
Ottawa will want to offload anywhere from 50 to 100 per cent of the project's cost on its private sector partners.
There are also political risks associated with building a bridge on foreign soil with Canadian money. Michigan Governor Rick Snyder, a big bridge supporter, is due to leave office in 2019, or before the bridge is slated to be completed in 2020. A less accommodating governor could make life difficult for the project. The bridge authority must also work closely with the City of Detroit to acquire land on the Michigan side.
The bridge may be high risk. But it's also high reward. A heavily used bridge would improve trade flows and boosts tourism.
The Trudeau government will be judged on whether it can deliver those rewards.
The last thing it needs is a lonely bridge to nowhere.